From the Singer Corporation kick-starting franchising as a business form to McDonald’s vegan deals, franchisors always have to change with the times
A key advantage of franchising is that the franchisor develops the business model, leaving the franchisees free to deliver exemplary service at the local level.
When the Singer Corporation, the sewing machine maker, kick-started the modern business format of franchising in the mid 1800s, life was very simple. All it had to do was appoint franchises to sell and service its machines and sit back and churn out the devices. Everyone was happy. This is a far cry from the situation now.
The same basic principle of the franchisees carrying out the local service is just as strong as ever. However, the role of the franchisor has changed massively, with heavy emphasis being placed on keeping abreast of changing technology.
Customers are now far more demanding than they were before the advent of online retail and social media. This frequently produces unrealistic expectations of how a product should perform or how immediate a service should be. A large section of the buying public now expect immediate delivery of a top quality product at a knock-down price. If they don’t get it, some retaliate by shouting from as many social media platforms as possible in an attempt to intimidate the supplier into complying with their demands.
This phenomenon presents a huge reputational risk for every brand. The magnitude of this is too large to leave in the hands of the hard-pressed local franchisee. For this reason every good quality franchisor will protect the brand by taking ownership of the most serious customer complaints.
Similarly, a well-run franchised business will have a central point at which social media is controlled and monitored. The risks are massive but the opportunities and benefits of getting this right are also substantial. It’s inevitable that if each franchisee engages in social media without it being properly coordinated, the company message will be fragmented. If it’s handled correctly and there is direction from the franchisor, the results from Facebook, Twitter, Instagram and so on can be highly beneficial.
Keeping abreast of changing buying behaviour is also a never-ending challenge. But if tackled correctly it can be seen as a source of business opportunities. The swift-footed in the catering and food retail industries have responded effectively to the rapid rise of veganism. McDonald’s now offers a wide range of salads and wraps causing some other businesses to lose out. Similarly Budgens, which has seen the rising popularity of farm shops, has formed a partnership with Nottinghamshire-based Gonalston Farm Shop. We have yet to see how successful this will be but I suspect this is a very astute move which will increase business for its franchisees.
In each of these examples the franchisor has taken advantage of changing customer buying patterns and slightly repositioned the business. Meanwhile, the franchisees can avoid wasting time worrying about how they’ll continue to be successful in a fast-changing business world. This is what franchising is all about.
So if you’re considering becoming a franchisor, ask yourself how recently you adapted to changing behaviour. Equally, if you’re considering buying a franchise, ask the franchisor how recently they successfully implemented a change or added a new product or service.
All this is a far cry from the Singer Corporation’s sewing machines. But just as fashions come and go, so do business trends and we all need to adapt our style to stay current.